Brazil cenbank to sell dollars to soothe Y2K fearsgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Thursday December 2, 8:13 am Eastern Time
Brazil cenbank to sell dollars to soothe Y2K fears
SAO PAULO, Dec 2 (Reuters) - Brazil's Central bank said it will hold a dollar ``repo auction'' on Friday in a bid to temporarily feed the foreign exchange market greenbacks and prevent Y2K volatility.
The bank said Wednesday night that it will sell up to $800 million on Friday that will be delivered on Dec. 29 and bought back on Jan. 5
``It is one more measure to prevent the millennium bug, another liquidity measure,'' the Central Bank's director of monetary policy, Luiz Fernando Figueiredo, told reporters.
Markets expect dollar demand could surge in December as investors sink their cash into a safe currency on fears the millennium bug could affect Brazilian institutions.
Brazil's real currency (BRBY - news) could also come under pressure this month as some $4 billion in foreign bonds, loans and interest payments come due.
On Friday, financial institutions will be allowed to buy up to 20 percent of the total offered at auction, in this case up to $160 million.
Figueiredo said further auctions could be held in December if there is demand for dollars.
Economists noted that the measure will not have an impact on international reserve levels because the dollars will quickly be repossessed by the Central Bank.
-- (M@rket.trends), December 02, 1999
Kinda like bein in a shipwreck, and mistakenly clinging to the rope to the anchor rather than to the lifeboat.
-- No where to run to (firstname.lastname@example.org), December 02, 1999.
If all that currency comes home, and the Fed has just printed up another $50 billion or so, won't that cause more inflation? (Too much money chasing too few goods)
-- Liz Pavek (email@example.com), December 02, 1999.
Tuesday December 7, 4:50 am Eastern Time
Brazil to sell $500 mln more in year-end dollar repos
SAO PAULO, Dec 7 (Reuters) - Brazil's Central Bank will sell an additional $500 million in dollar repurchase contracts for delivery at the year's end in a bid to temporarily feed the U.S. currency market and soothe Y2K fears.
The monetary authority said late Monday it would sell the much-wanted contracts for delivery on Dec. 29 on Friday. The dollars will be bought back on January 10.
The Central Bank sold $800 million worth of similar dollar repos for delivery on Dec. 29 last Friday but demand for the contracts had reached $1.4 billion.
The bank decided to supply the market with greenbacks at the end of the year to ease fears that computer bug problems could hit Brazilian institutions.
-- (M@rket.trends), December 07, 1999.